Monthly Archives: March 2011

As I look for ways to improve, I am inspired by other lean thinkers and bloggers. I see what they are trying and look to how that might work for me. I try and experiment with things in order to make my job easier and to feel more in control and organized.

I decided to start a series that will be based on what I have tried in order to make my work better. It may be small or large things and most likely it was an inspiration I got from someone else. I hope that by passing along what I have learned that it may inspire others the way others have inspired me.

I decided this was something I was going to try to improve my work. I spent a few months deciding how I was going to go about this before jumping in and trying it. Finally, I did give it a try. I wish I had better news, but my first and second iterations were not very successful.

I tried using note cards and a bulletin board to move the work. I chose my value stream to be WIP Queue, In-Process, and Completed. I color coded the tasks by which customer I was serving since my role is internal consultant.

I found I was re-prioritizing the work on a constant basis, mainly because my customers were re-prioritizing their work. Plus, like Tim I don’t sit still. I am out in the manufacturing plants or in different parts of the main building all the time so I don’t get to see the bulletin board as much. I really liked my digital task list that syncs with my Blackberry. Having the tasks mobile was very helpful.

I was also having trouble squeezing time in to complete these tasks, but I started blocking time off on my calendar to work on some tasks.

In the end, the experiment was a failure. But, I did learn what worked and what didn’t and why. I still want to improve my work flow so further reflection and study is necessary. With Tim’s recent post about how and why he digitized his personal kanban, I was exposed to digital tools that I did not know existed. I will now take the time to look at some of the tools Tim presented and conduct some research of my own to figure out the best way to incorporate the right tools to help with my process. Find the tools to fit the process, don’t fit the process to the tools.

Not all improvements work out and I think it is to highlight those and talk about those as much as the ones that did work. Happy improving!

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Joe Wilson has worked in a variety of continuous improvement, problem solving and engineering roles in manufacturing and distribution functions in the automotive, electronics, and food/grocery industries. He was responsible for site leadership of Lean implementation during the launch and ramp up of becoming a supplier to Toyota and was able to work directly with their personnel and the Toyota Supplier Support Center. His training background includes courses in Lean/TPS through TSSC and the University of Kentucky’s Lean Systems program. He is a Six Sigma Black Belt and a Shainin Red X Journeyman in addition to training in Kepner-Tregoe problem solving techniques. Joe also has a BS degree in Engineering Management from the University of Missouri-Rolla.

Lean teachers have taught us things like “go see”, “ask why”, and “thoroughly understand what is happening at the gemba”. Enough practice with these mindsets can teach you how to quickly and effectively evaluate current states and identify where our gaps may exist on the way to our ideal state.

If you are like me, you probably really enjoy touring other people’s operations or even watching shows like “Ultimate Factories” or “How It’s Made” on TV to see how other people do what they do. You’ve also probably tried to copy an idea or two that you’ve seen doing one of those things. I know I’ve tried several tips, tricks, or notions that I’ve picked up through these observations. Some have been fantastic. Some have been total, immediate failures. And some others may not have worked right off the bat, but have triggered discussions that have led to some really great solutions. Those types of activities aren’t really what I think of when I picture benchmarking. I would put those in the same group as reading a book or taking a class and applying an idea from one of those. Great places to get a seed to plant or to identify rough milestones, but you shouldn’t really be finding blueprints in them.

The danger in a benchmarking mindset from some circles comes from looking at similar processes or industry data and working in a “We should do it just like they do” mindset. Don’t get me wrong, it is extremely valuable to have an understanding of where the competition is or where the bar is set at. One of my favorite examples of this in lean lore is how, in the early days, Toyota believed that German manufacturing was 3 times as productive as Japanese manufacturing and the Americans were 3 times as productive as the Germans. Toyota then determined they had to become 10 times better than they currently were to be better than the best manufacturers and compete on a global scale. This scale wasn’t used as an excuse to copy American manufacturing, it was used as a line in the sand to set a goal.

Another mantra that I continually remind myself of comes from statistics/data analysis guru Dr. Donald Wheeler who says “No statistic has any meaning apart from the context for the original data.” All of our observations or industry data studies or side by side comparisons of plants only work if we can phrase them in terms of the context. If they lack context or we don’t understand the context well enough, we may not get any valuable information from which to build. In the wrong hands, this can lead to a tremendous waste of time and resources to try to be like someone else. I don’t think that’s why we do what we do as Lean thinkers. Our greatest abilities as lean leaders don’t lie with our ability to recognize and copy someone else’s answers. Our greatest strengths come from our ability to thoroughly understand our own states and solve our own problems.

Last week I wrote a post about how the earthquake was the cause for the supply chain interruption at Toyota, not lean (post here). It was centered around an article I had found on Bnet. Since then two other articles have been written regarding the Japanese crisis and lean.

The first was written by Margaret Hefferman (article here). She starts out by saying:

Beyond the tragedy of the Japanese tragedy, the industrialized world is experiencing a profound philosophical aftershock. Much of our business theology about lean, mean just-in time manufacturing, about re-engineering, outsourcing and globalization is wrong.

Again, this quote makes you wonder about the understanding of lean. This is the only mention of lean in the article.

But one of the reasons why the business impact of the natural disaster is so widely felt is because our supply chains are now so immense.

The rest of her article talks about how a supply chain spread across the world creates great complexity. It also makes a company more vulnerable to natural disasters, political uprisings, and harder communication between people.

I think Margaret makes some great points that actually support the lean philosophy on complexity in supply chains and supplier relationships.

You absolutely should learn from what is happening in Japan — just don’t overreact.

Jeff is right. We should use this as a learning experience but don’t overreact to this crisis. Jeff gives some good advice on what companies should NOT do during this time.

Increase inventory. Running out of supplies, materials, and finished goods could cripple your business. So can the carrying costs involved with maintaining excess inventory “just in case.” Maintain inventory levels based on more likely risks: Spikes in demand, late deliveries, or production/quality problems.

Add suppliers. Some Japanese firms are unlikely to resume production for months, so some businesses are scrambling to find other sources. Still, don’t create multiple redundancies in your supply chain. You will only add administrative costs, additional complexity to your purchasing systems, and pay incrementally higher supply costs since smaller order quantities typically mean higher prices. (If you are largely dependent on one supplier for a key supply, definitely establish other sources.)

Fatten manufacturing. Lean manufacturing practices are under fire in some circles, sometimes due to a lack of understanding of lean manufacturing. Lean manufacturing isn’t complex; it’s simple. Simple is good. Adding buffers and additional WIP and redundant capacity and crewing typically decreases productivity and increases cost.

Stop outsourcing. Working with freelancers or outsource partners in other countries exposes your risk to service interruptions. Bringing those functions in-house exposes your business to higher costs. Treat outsourcing like you do your supply chain: Don’t rely on a sole source. Have backups in place. Know who to call in an emergency. While it may be tempting, bringing every function in house could result in a financial disaster for your firm. (Bottom line: If it made business sense to outsource before the earthquake, it makes business sense to outsource now.)

Change because you think you have to. Your ability to adapt is what makes you a successful business owner. Make changes to your business model based on logic and foresight, not because you feel you have to do something in response to a crisis that may never impact your business. Sometimes the best response is no response, especially if you’re already doing most things right.

This all sounds like it is right in line with the lean philosophy and not in contradiction to it.

Jeff ends with what companies should do.

What should you do in response to the Japanese crisis? Take a close look at inventory levels, at the strength of your supply chain, at potential weaknesses in your manufacturing/shipping/sales processes, and at how you manage any outsourced functions. Look for glaring weaknesses. Just don’t work to create plans and systems that will mitigate every possible risk.

Pause, reflect, make smart changes where necessary, and stay focused on what made your business successful in the first place.

Sounds like good advice to me. Companies shouldn’t overreact and add inventory and suppliers because a giant “What If”, but we shouldn’t ignore what happened either. We should learn from it and apply changes that make sense to mitigate risk without the company getting away from what made it successful to begin with.

A concept that is commonly referred to from a lean perspective is the stand-up meeting. Instead of sitting in a conference room where everyone can get comfortable and talk about things for hours……….and yes I mean hours, the stand-up meeting is a shorter, to the point meeting. During the stand-up meeting the group focuses on the problems and opportunities. Two benefits of standing up is people are more willing to be short and concise with their statements and people are more willing to go and directly observe the problem or opportunity they are discussing. When sitting it is even easier to problem solve in the conference room.

Below, Dogbert the Consultant suggests stand-up meetings. It may be for the wrong reasons, but I bet the meetings are shorter. Great depiction of misunderstanding a concept. Hilarious cartoon though.

(Click on image to enlarge)

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Innovation is one of the key buzzwords nowadays. When you hear the word innovation, what do you think of? Most people think of product or something tangible. And that is what a lot of companies are hanging their hat on.

But innovation isn’t just about products. Innovation is about process too. Innovation is about setting up a process in a new and distinct way. Setting up a process that can create a step change in results taking your business to a new level.

I’m not talking just about manufacturing processes, but also business processes. If you can have an accounts payable process that is fast and easy would banks be willing to loan your company more money? Would you even need to borrow money? What about a quick, reliable process to assess the quality of suppliers? How would that help?

Next time your company talks about innovation, bring up the idea of innovative processes…not just product.

The first part of the article had some good information and was informative, but then came this paragraph:

When complex systems break down, they really break down

The old model of having a plentiful supply of components on hand was costly and inefficient, but it had one big plus: It made it easier to recover quickly from an economic downturn or a natural disaster that disrupted business. In a nutshell, it was durable, if dumb.

My jaw hit the floor from shock when the author mentions that traditional supply chains are costly and inefficient but defends them again because it is quicker to recover from a natural disaster. What!? Can you imagine sitting in executive meeting that goes like this:

Person 1: “Are supply chain is really working well. The costs are down and we are delivering great value to the consumer.”

Person 2: “But what happens if a once in a lifetime 9.0 earthquake causes a tsunami that knocks the earth slightly off its axis? Will our supply chain work then?”

Person 1: “Great point. We should triple our inventory immediately.”

The lean model allows for an automaker like Toyota to produce better cars and adjust more nimbly to fluctuations in demand. But because it’s accordingly more complex and required more brain- and communications power to operate correctly, it’s vulnerable to the type of catastrophic breakdown we’re now witnessing in Japan.

Where is he even hearing about lean? In all my time studying and learning about lean, I have never heard that lean is complex and requires significant communication power to operate. If someone understands that lean at the basic level is about eliminating waste then how can you draw the conclusion that it is more complex? At the fundamental lean is the complete opposite of this statement. It is about making things simpler, including communication.

I encourage you to go and read their very thoughtful insights and your own if you would like. I didn’t have an account and as upset as I was I didn’t want to take the time to sign up for the free account to post something and then never use the account again. So, I decided to use my blog as my forum for this one and didn’t want to rehash some of the great insights from others.

I appreciate your patience on this rant and now I will return your to your regularly scheduled program.

For as long as I can remember, I have been working to reduce inventory. My experiences have always been with companies that employee a few hundred people or more and have revenue of at least $100 million a year.

Now I am working with a company of two people and revenue of under $10,000. It is the very small company that my wife has started out of our home. Last year was year 1 and it went pretty well. Well enough that this year we decided to take a few more calculated risks in order to grow the business and reach more customers in the area.

Because my wife is the marketer, salesperson, developer, manufacturer and everything else ‘er things have to be run a little differently. We have kept the manufacturing batches rather small so far. One batch of 8 bars of soap per run. With more risks we have to add inventory.

One risk we have taken is adding our product to local store. We own the product until it is sold at the store. This almost doubled our inventory since we have to have inventory ready for internet orders and the events we do around the area.

Another lesson we learned last year was 90% of the events we participated in are from Sept. – mid-Dec. It was very hard last year to make only the soap sold in the 5 days or so between events. This year we are going to participate in bigger events, plus some of the same events from last year. As we get more and more repeat customers, the making just-in-time is going to be harder and harder. So this year we will building inventory of our main products ahead of time.

While we will be adding more inventory earlier, we believe this is the right thing to do this year. We can’t afford to hire someone to work for us and trying to raise two kids while running a business is hard enough to do without pulling all-nighters to make product.

We know it will tie up cash for a little longer but we are willing to take that risk this year. What are your thoughts?

I listen to comments like, “Well they aren’t using the right codes for the defect.” or “People just need to put the coding in the system properly and we could figure the problem out.”

WHAT!?!

Don’t misunderstand me. Ten years ago you would have heard me say some of the same things. So, I do have patience with teaching people to go and see. Once I learned to go and see it became very freeing because I didn’t stress about what the data said. I spoke to facts.

Data is a good thing. I am not saying we should ignore data, but we need to know its place. Data can help point us in the direction of problems. It can tell us where we should go and look for facts.

Facts to me are what you actually see happen. What you have observed. It isn’t the hearsay you get in a conference room. Facts explain what is actually happening and add deeper meaning to the data.

I lived a great example recently. In a conference room, managers looked at the data and saw a problem that was happening. They started talking about what was happening and why. They asked if I would look into fixing it. I said I would look at what is actually going on. I spent 2 hours directly observing the work and realized the one problem they were talking about was actually several different problems out on the floor. I asked the person actually doing the work to take a couple weeks worth of data based on what was actually happening. The data showed they actually had 2 big problems that made up 80% of the total errors the original data showed. I then did another hour of direct observation between an area that had the problem and an area that did not. I was able to explain the problem with facts that I observed and data to support those facts to add concrete to what I observed. At that point, there was some obvious ways to correct the situation.

Data and facts are different. They are not substitutes for each other. Data and facts can be a very strong combination when used together to understand a problem.

Joe Wilson has worked in a variety of continuous improvement, problem solving and engineering roles in manufacturing and distribution functions in the automotive, electronics, and food/grocery industries. He was responsible for site leadership of Lean implementation during the launch and ramp up of becoming a supplier to Toyota and was able to work directly with their personnel and the Toyota Supplier Support Center. His training background includes courses in Lean/TPS through TSSC and the University of Kentucky’s Lean Systems program. He is a Six Sigma Black Belt and a Shainin Red X Journeyman in addition to training in Kepner-Tregoe problem solving techniques. Joe also has a BS degree in Engineering Management from the University of Missouri-Rolla.

If you are asked to explain Lean in simple terms to the uninitiated, how do you do that? Here’s my take:

As a tookit, Lean is about establishing methods to define and solve problems in your business.

As a business philosophy, Lean is about providing your customers the best possible value for their money (Quality, Cost, Delivery) while maximizing the company’s profitability (or viability for a NFP) for the short and long term.

As a mindset, Lean is about constantly striving to (or believing that) you can be better at everything that you are doing than you are right now.

What do you say? Am I oversimplifying this or leaving something out? Is this straightforward enough to make people want to learn more or at least not reject it out of hand?

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Leading a lean transformation is not a spectator sport. You have to get off the sidelines and into the game if anything is actually going to change. Too many times I hear managers and executives say, “I completely support lean and the work you are doing.” This is a good start but that is not what lean thinking is about. Lean is about putting the principles and rules into action. We must change the way we are doing things or we are becoming Albert Einstein’s definition of insanity.

What stops someone from getting out and leading the lean transformation? The two things I have run into is not knowing where to start and fear.

Where to start? is a common question. To be honest, it doesn’t matter. Read a book, an article, or a blog. Information on lean is everywhere today. Pick up something, read it, try to apply it, then reflect and see how what you tried worked and how it didn’t work. Lean is about learning and improving, so learn something and try it. Then improve it. Continue that cycle over and over.

One obstacle to the learning cycle is fear. Fear of failure or the fear of not being the expert. People may be willing to learn and improve, but there may be a fear of failing. What will people think? How will I be perceived if I fail? I don’t think it is failing that people might grumble about. It is how you react when you fail. If you try and fail and give up, that can be seen as failure because you never tried to fix it. If you try and fail, but learn and apply the learning to try again chances are you will succeed. When you succeed you will be seen as persistent.

Another reason people may be afraid to try lean is not being the expert. I have been learning, implementing, applying, and improving my lean knowledge for over 10 years. To this day, I still hear, “How can lean be all that good? You failed and you know more about lean than me.” You do have to have thick skin to hear that, but then you have to take the time to explain that failing is ok. Learning is about failing. Not everything works the first time.

Leading a lean transformation is very hard work. If it was easy everyone would be doing it. You don’t have to be a lean change agent to lead the transformation. In fact, it is preferred that you are not. Leading from a management role is much more effective. Most companies pay management more than the direct employees adding value to the product/service. I believe part of the reason for this is because we are expected to do the hard work of leading by setting an example.